GHANA AND KOSMOS AGREE OVER ILLEGAL USE OF OIL DATA — KOSMOS SETTLES FOR $20M

Ghana and Kosmos sign truce agreement
By Martin Arnold and William Wallis in London
Published: December 22 2010 03:21 | Last updated: December 22 2010 03:21

Ghana has patched up its differences with Kosmos Energy, the Texas-based oil wildcatter, opening the way for its private equity owners to sell the company’s stake in the west African country’s vast offshore Jubilee oilfield.
The truce agreement – granting Kosmos immunity from criminal or judicial actions for past events – was signed by the two sides as they met to celebrate the start of oil production from the Jubilee field this month.

Earlier this year, a $4bn deal to sell Kosmos to ExxonMobil, the world’s biggest oil company, collapsed because of opposition from Ghana. At the time, relations had deteriorated into a slanging match between Accra and the Texas company, which is owned by US private equity groups Blackstone and Warburg Pincus.

But Kosmos said it had agreed with Ghana to “amicably resolve several issues that have existed among them” including the company’s use of oilfield data, its debt facility, corporate structure and a recent mud discharge off the coast of Ghana.

“Additionally, the attorney-general of Ghana has formally confirmed that Kosmos will not be the subject or party to any criminal or judicial actions in Ghana for events prior to such confirmation,” it said.

The Ghana National Petroleum Company (GNPC) has been trying to buy the Ghanaian assets of Texas-based Kosmos, potentially in a joint venture with other oil companies, including CNOOC of China, Norway’s Statoil and the UK’s BP. Statoil and BP have also expressed interest at different times.

Officials close to GNPC said that as part of the deal the Texan company had agreed to pay a fee of around $20m in compensation for having shared data owned by the GNPC with potential investors. “With first oil from the Jubilee field flowing and these issues behind us, the government, GNPC and Kosmos have reaffirmed their positive and forward-looking relationship,” said Brian Maxted, chief executive of Kosmos.

However, the attorney-general in Ghana is still investigating EO Group, a company set up by two political allies of Ghana’s former president John Kufuor, which initiated a deal to bring Kosmos in to the consortium exploring the Jubilee field in 2004.

The US Department of Justice dropped a corruption probe into Kosmos and EO earlier this year. Both Kosmos and EO have denied any wrongdoing.

The private equity groups have been considering a potential initial public offering of the Texas-based wildcatter, (KOSMOS) which could value it as high as $5bn. But the plans for a potential IPO could also be a negotiating tactic to push up the price of an expected bid for the company by GNPC.

Tullow Oil, the UK-based group, is the lead operator and biggest shareholder in the Jubliee field, which is one of the world’s biggest deep water oilfields, estimated to hold about 800m barrels of crude.